Summary: In an international context, this paper analyzes the main drivers of Brazil's bank spreads measured by the net interest margin, by estimating internationally comparable measures for (i) institutional and regulatory (micro-) factors; (ii) macro-economic factors; and (iii) banking competition factors. The paper produces and applies a novel data set covering 197 areas and countries; ranging from 1995 to 2009, including 106 banks for Brazil and 16,434 banks worldwide. The analysis finds that micro-factors are the main drivers of spreads across the world. In the case of Brazil, the spread is found to be strongly accounted for by micro-factors -- also in international comparison. For example, micro-factors contributed 7.2 percentage points (79 percent) of the 11.5 percent total spread in Brazil in 2009, while macro-factors and banking competition factors jointly accounted for only 1.9 percentage points (21 percent). Conversely, Brazil does not rank high in international comparison in terms of macro-economic risk: Brazil and other countries from Latin America and the Caribbean are found to feature the highest micro-factors in the world while having the second-highest spreads and the second-lowest contribution of macro-factors. These unique findings suggest that countries striving toward reducing bank spreads should consider policies aimed at reducing microeconomic frictions in their banking sectors, in particular, (i) the economic costs of holding reserves, (ii) credit risk, and (iii) implicit interest payments. In terms of policy dialogue, this would be especially relevant for Brazil and for Latin American and Caribbean countries in general.